The fiscal and monetary response to COVID‐19: What the Great Depression has – and hasn't – taught us
| Autor: | George Selgin |
|---|---|
| Jazyk: | angličtina |
| Rok vydání: | 2021 |
| Předmět: |
Inflation
fiscal stimulus New Deal media_common.quotation_subject Monetary policy Geography Planning and Development monetary policy Aerospace Engineering Iimr Conference N1 Great Depression Monetary economics Development credit policy Aggregate expenditure Dominance (economics) COVID‐19 Economics Balance sheet Bank reserves E5 E62 media_common |
| Zdroj: | Economic Affairs |
| ISSN: | 1468-0270 0265-0665 |
| Popis: | Although some regard the New Deal of the 1930s as exemplifying an aggressive fiscal and monetary response to a severe economic crisis, the US fiscal and monetary policy responses to the COVID‐19 crisis have actually been far more substantial – and, so far, much more effective in reviving aggregate spending. Although many fear that these responses, and the large‐scale increase in bank reserves especially, must eventually cause unwanted inflation, the concurrent sharp decline in money's velocity has thus far more than offset any inflationary effects of money growth, while forward bond prices reflect a general belief that inflation will remain below 2 per cent for at least another decade. Notwithstanding the growth of the Fed's balance sheet, Fed authorities can always check inflation by sufficiently raising the interest return on bank reserves. Nonetheless, recent developments have heightened the risk of ‘fiscal dominance’ of monetary policy at some point in the future. |
| Databáze: | OpenAIRE |
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